Today, the American heavyweights JPMorgan Chase, Citigroup, and Wells Fargo present their second-quarter results.

JPMorgan reported a remarkable 25 percent profit surge: $18.1 billion dollars compared to $14.5 billion dollars in the same quarter last year. This increase was primarily driven by a restructuring of JPMorgan's stake in Visa.

Visa Effect Boosts Earnings

In the second quarter, JPMorgan converted its equity stake in Visa into common stock of the credit card giant, earning nearly $8 billion dollars in a one-time gain. Without this and other special effects, the profit would have slightly declined to $13.1 billion dollars. Revenue increased by 22 percent to $50.2 billion dollars.

Wells Fargo also showed a small profit decline in its core business: the San Francisco bank posted a profit of $4.91 billion dollars, 1 percent less than the $4.94 billion dollar-profit in the same quarter last year. Revenue rose by 1 percent to $20.7 billion dollars.

Fears Not Realized

Only Citigroup managed to make significant progress without special effects: With a quarterly profit of $3.2 billion dollars (up from $2.9 billion dollars in the same quarter last year), it pleasantly surprised analysts, who had expected a decline to $2.7 billion dollars. Revenue amounted to $20.1 billion dollars.

Concerns that the American banking sector would be burdened by increasing loan defaults, especially in corporate loans, have not materialized so far.

High Bar for Europeans and UBS

American banks continue to make money at a high level.

This sets a high bar for European banks, which will also report their results in the coming months.

UBS Reports on August 14

In Switzerland, the quarterly results of the remaining major bank UBS, scheduled for August 14, are of particular interest. Julius Baer will report on July 25, followed by Vontobel a day later.

UBS posted a profit of around $30 billion dollars in the second quarter of 2023 following the acquisition of Credit Suisse. After accounting for one-time effects of the acquisition, two negative quarters followed in the second half of 2023 and a profit of $1.8 billion dollars in the first quarter of 2024.

Regarding profits, US banks have largely decoupled from their European counterparts, including UBS. The recent figures from major US banks suggest no immediate change in this trend.